Within the last 30 months, from January 2023 to the end of H1 2025, about 33 startups shut down in Africa, reflecting a period of necessary market correction.

In the first half of 2025, there were six shutdowns (four in Q1 and two in Q2). This represented a significant 33 per cent decrease from the nine shutdowns recorded in H1 2024, suggesting that the wave of post-boom market corrections may be slowing down, by so doing indicating a potential move towards a more stable and resilient ecosystem where companies are building more sustainable business models from the outset.

TechCabal Insight released yesterday also revealed that the first half of 2025 marked a confident rebound for the African tech ecosystem. After a period of correction, the market showed renewed strength, attracting over $1.42 billion in funding across 243 deals. This resurgence was driven by a flight to quality, with investors concentrating capital in sectors like Fintech, which alone captured nearly 45 per cent of all funding with $638.8 million.
Further on the slowdown, the Insight disclosed that there were five shutdowns in Nigeria and one in Kenya,

According to the report, these shutdowns highlighted the intense competition and significant operational pressures that startups face in Africa’s most developed, but also most competitive, markets as they navigate tough local economic conditions.

Specifically, these five Nigerian start-ups shut down in the first half of 2025 after raising some substantial funds, including Joovlin raised $100,000; Bento Africa, $3,100,000; Edukoya, $3,500,000; Heroshe and Okra, $16,500,000.

Kenya had Lipa Later, which raised $1,660,000 before closing shop with investors’ funds.
Based on publicly disclosed information, the Insight revealed that African startups laid off at least 765 employees in the first half of 2025.

According to it, this continued a necessary trend of workforce adjustments seen since 2023, though it is important to note that the actual number of layoffs across the ecosystem is likely higher, as many are not publicly announced.

It noted that the current figures reflected a significant shift in how companies are managing their operational costs and growth expectations in today’s market, moving from rapid hiring to more sustainable team structures.

The report said the pace of layoffs in H1 2025, with 366 in Q1 and 399 in Q2, showed a marked improvement compared to the same period last year.

The 765 employees laid off in the first half of 2025 are a sharp 56 per cent decrease from the 1,730 layoffs recorded in H1 2024. This dramatic slowdown suggests that the most difficult period of workforce corrections may be over, as the ecosystem settles into a more stable operational rhythm,” it stated.

Further, it stated that since 2023, workforce reductions have been most heavily concentrated in the ‘Big Four’ markets, based on disclosed data. Kenya saw the highest number of layoffs with 2,258, followed closely by Nigeria with 1,581, indicating that the largest and most-funded ecosystems also experienced the most significant adjustments as startups recalibrated their operations after a period of aggressive growth and hiring.

According to it, in H1 2025, Nigeria (416) and Kenya (328) continued to see the most layoffs.
The Insight noted that Merger and acquisition activity in Africa’s tech ecosystem has shown consistent growth since 2019, signalling a maturing market where companies are actively joining forces.

In the first half of 2025, a total of 29 M&A deals were recorded, the highest number for any H1 period on record. This represented a significant 45 per cent increase compared to the 20 deals seen in H1 2024 and a 53 per cent increase over H1 2023.

The report said this sharp rise highlighted that strategic acquisitions are becoming an increasingly important growth strategy for established companies looking to expand their market share, technology, and talent pools.

It observed that the acceleration in M&A activity is stark when comparing the first half of 2025 to the same period last year. The jump from 20 deals in H1 2024 to 29 deals in H1 2025 marked the most significant year-on-year growth in recent history.

“This suggests that as the funding market stabilises, well-capitalised companies are now more aggressively pursuing acquisitions as a primary path to growth and market leadership,” it stated.